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Changing the poverty status quo

  • Published at 06:08 pm February 23rd, 2016
Changing the poverty status quo

Our current government has committed to eradicate extreme poverty by 2021 and has endorsed a new National Social Security Strategy to help it achieve this goal. Within the NSSS, one prominent mode of transfer is cash-for-work. C4W is a form of social transfer that provides temporary employment in public projects (such as repairing roads or bridges) to vulnerable people.

Implemented by the LGED Ministry and union parishad officers, these programs have two components -- paid work for destitute beneficiaries and improved infrastructure.

Whether these programs truly serve the needs of the poorest depends on effective implementation and strategic design. Let us examine some of the factors that need to be considered, and some of the challenges.

Graduation

Graduation out of extreme poverty requires a bundled package of support, including an injection of capital of about $500 (based on the learning from programs such as Economic Empowerment of the Poorest and BRAC-CFPR).

Daily wages help meet the immediate consumption needs of extremely poor beneficiaries and their families, but do not lead to an upward trajectory out of poverty unless some form of forced savings is built into the program that can result in cash accumulation.

If such forced savings are a part of the program, beneficiaries may have enough money at the end of a year or two to purchase an income-generating asset (cows/goats/sewing machine), but even that will not be enough to ensure the catalytic leap out of extreme poverty. Evidence shows that without market linkage and access to public services, families are unlikely to graduate out of extreme poverty.

The inter-generational transfer of poverty will only be broken if beneficiary children can find jobs after class 10. If no jobs are available, or if the cash is not conditional on children’s enrollment in school, poverty continues and no systemic changes take place. Beneficiaries will marry off their daughters and their sons will work as cheap labor, same as their fathers. The challenge for social protection programs is to manage at scale the customised support necessary, the hand-holding, training, and confidence building necessary, to empower a family to graduate. For this, proper granular data is necessary and case-by-case support. 

Selection

In Bangladesh, the number of needy people always exceed the number that can enroll in a program, so people are going to be excluded (until the government increases outreach), but inclusion errors should be reduced -- ie people who are not entitled to the support should not receive it. This, however, is another challenge, because selection is not transparent and often depends on the ability to bribe union members or chairmen.

Perhaps more than 50% of the people covered by some social protection programs are not truly eligible. Another challenge is the dynamic nature of poverty -- how should programs handle those who move in or out of eligibility. For example, destitute women with no husbands (widowed, divorced, or abandoned) may be selected because they are eligible, but once they start earning, some of their opportunistic husbands return.

Unfortunately, some of these scoundrels manage to weasel their way back into the family, but this then renders the woman beneficiary ineligible. However, if she is thrown out of the program, her husband might leave again, creating a vicious cycle. Finally, though most C4W programs stipulate a maximum age (of 50 years), at least one-third of the women who show up are over 50 and lying about their age. It is indeed sad when 60-year-old women want to do hard labour to earn Tk200 a day to eat.

Work

Road work is literally back-breaking work. The shovels in the hands of the diminutive women beneficiaries are heavy. With calloused palms and hardened hearts, these women must labour beneath the sun to earn a decent meal.

In case of injuries, such as a smashed toe, there are no insurance or medical funds. Despite this, beneficiaries fight one another to join the program so they may work with guaranteed wages, such is their desperation. It would be wonderful if we could come up with other forms of work for “cash for work” programs.

Fund channel

Fund channels in social safety net programs are cumbersome. There are many layers of signatures required and finally, cash is disbursed to beneficiaries as cash-in-hand. As a result, funds are delayed and workers are not paid in time. Fortunately, the government aspires to switch to digital financial service channels soon. 

Power structures

Unfortunately, when you try to help someone out of poverty, another three forces try to pull her back in. Union members, community members, MPs -- just about everybody wants to get their greedy paws on some of the funds. While this is irritating, it also raises important questions about UP ownership.

How can local government officers be brought into an incentive structure that makes them want to help people out of extreme poverty? What can be done to motivate them? I heard a UP chairman asking an abandoned woman why her husband left her, implying that it was her fault.

Three of the eight male union members I met on one visit were polygamous, adding to my anxiety regarding their gender attitudes. Finally, I was shocked to find many union members are illiterate, with no minimum standard of ability to problem-solve or think critically, far from representing their community.

Impact monitoring

None of the government safety net programs has robust impact monitoring mechanisms, but fortunately this is one of the big parts of the new policy and reform strategy. With support from UNDP, LGRD is now developing a robust monitoring and evaluation platform to improve the effectiveness and impact of its C4W transfers.

This is a promising step forward. It is yet to be seen how far other safety programs will go to develop tools to empower local government officers to do their job effectively so that transfers reach the poorest.

With the current government’s $3 billion social protection budget and the honourable prime minister’s vision to lead us out of extreme poverty, let us hope the promising social protection reforms are implemented well, with strong technology tools to ensure transparency, effectiveness, and impact. Then we will be well on our way to achieving our goal of zero extreme poverty by 2021. 

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